Silver (XAG) Daily Forecast: Double Bottom Support Near $28.70; Buy Now?

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Published: Jun 26, 2024, 07:46 GMT+00:00

Key Points:

Silver remains under pressure around $28.95, hitting an intra-day low of $28.71.
The US dollar's strength, driven by Fed comments, continues to pressure silver prices.
Geopolitical tensions, including Russia-Ukraine and Middle East conflicts, support silver's safe-haven appeal.

Silver (XAG) Daily Forecast: Double Bottom Support Near $28.70; Buy Now?

Fed’s Hawkish Stance and its Impact on Silver Prices

The US dollar continued its upward trend after hawkish comments from Federal Reserve officials. They indicated that the Fed is unlikely to cut interest rates soon due to a strong US economy. This stance supported a rise in US Treasury bond yields, benefiting the USD and putting pressure on silver prices.

Fed Governor Michelle Bowman emphasized readiness to raise borrowing costs if inflation doesn’t ease, stating it’s not yet time to consider rate cuts. Meanwhile, Fed Governor Lael Brainard suggested future rate cuts might be warranted depending on inflation expectations, indicating a cautious approach to monetary policy.

Hawkish comments from Fed officials, highlighting a delay in rate cuts due to a strong US economy, contributed to higher US Treasury yields and a stronger US dollar. This pressure on silver prices, which often move inversely to the dollar and are sensitive to interest rate expectations.

Geopolitical Tensions Support Silver Prices Amid Market Uncertainty

Russia’s Foreign Ministry summoned US Ambassador Lynne Tracy, accusing the US of involvement in a violent incident in Crimea and warning of impending retaliatory actions. This escalation increases tensions between the two nations.

Meanwhile, concerns persist over potential conflict between Israel and Lebanon due to rising provocations by Hezbollah, maintaining anxiety and supporting safe-haven assets like precious metals. These geopolitical developments highlight ongoing instability, influencing market sentiment.

The geopolitical tensions, including accusations between Russia and the US over Crimea and heightened risks of conflict in Israel and Lebanon, have boosted demand for safe-haven assets like silver, supporting prices amidst market uncertainty.

Short-term Forecast

Silver (XAG/USD) remains under pressure around $28.95, with key support at $28.71. Traders should monitor the final Q1 GDP and PCE Price Index releases for further direction.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – ChartOn the 4-hour chart, Silver (XAG/USD) remains under pressure, trading at $28.95. The pivot point is set at $28.71, indicating a critical level for market direction. Immediate resistance is seen at $29.26, with subsequent resistance levels at $29.70 and $30.17.

On the downside, immediate support is at $28.32, followed by $27.99 and $27.62. The 50-day EMA stands at $29.59, while the 200-day EMA is at $29.51.

The chart also shows a double bottom pattern, suggesting a potential buying trend. However, silver remains bullish above $28.71, and a break below this level could trigger a sharp selling trend.

About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.